Is It Ethereum's Turn to Rally? 3 Reasons This Leading Crypto Could Be About to Climb Even Higher.

Key Points

Ethereum was falling sharply in the first half of the year.

It's now climbing rapidly.

There are solid reasons to suspect that the climb will continue for a good while.

Through this past spring, Ethereum, the second‑most valuable cryptocurrency, slogged along as investors fretted about scaling, regulation, and lackluster demand. Fast-forward to July, and the coin has roared back to life, forcing skeptics to ask whether the comeback has legs. It's up 56% during the past 30 days.

1. Reversion to the mean

Markets rarely stay depressed forever, and Ethereum was a textbook case of an oversold crypto with persistently abysmal sentiment.

From January to mid-June, its price tumbled, at one point being down by more than 50% year to date. Even diehard evangelists were starting to publicly fold their positions after years of holding. By June 20, the amount of positive social chatter about the chain was at multiyear lows -- but the recovery was already quietly underway by then.

Meanwhile, the network kept adding roughly 1 million new wallets per week, evidence that adoption hadn't stalled. That disconnect didn't last too long. Ethereum has more than doubled since April, jumping from the low $1,800s to around $3,800 as of July 28. There's also still no evidence of froth that often caps bull cycles.

2. The Pectra update is working as intended

The second catalyst is that on May 7, Ethereum pushed the Prague‑Electra update, better known as Pectra. The update introduces higher validator staking limits, lighter wallets that feel more like regular apps and can operate smart contracts, and twice the data room for Layer 2s (L2s), which also helps with scaling the chain's throughput.

3. Capital is gushing in

Institutions are directing a firehose of cash toward exchange-traded funds (ETFs) that hold Ethereum, and it's having a big impact on the price.

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